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“Capital accumulation that occurs through asset price appreciation, unaccompanied by growth in GDP, is now considered to be a desirable feature in capitalism — and not an obvious bug — provided that central banks can provide liquidity without adding to consumer-price inflation,” said Meister. “We’re trying to open a strategic debate about how to harvest the benefits of the illiquidity potentially created by democratic politics.”
As one of the faculty members leading the project, he feels that liquidity support by the government should not increase the financial power of those with pre-existing wealth.
Through the Berkeley Program on Finance and Democracy, researchers will also expand the body of scholarly work around the political ramifications of the digitization of financial infrastructure, an underexplored topic that is reshaping the nature of monetary sovereignty. The rise of algorithmic trading, digital payment systems, and cryptocurrency networks represents more than mere technological innovation — it constitutes a fundamental reorganization of how money and financial power operate.
UC Berkeley economists have established innovative ways of tracking global financial flows toward tax havens; the Berkeley Program on Finance and Democracy will augment this work by studying other ways in which wealth travels across borders. Theorists will propose financial systems and instruments that can empower citizens and voters. Researchers will analyze new crypto-financial power structures, their promoters, and the regulatory and geopolitical challenges posed by these new structures.
Pierson is excited that the program has now hired an inaugural program director, Brian Judge, who will manage a robust regime of research, communications, and events.
“The world is speeding up; our goal is to contribute to better understanding where we’re going,” said Pierson.